WHITEPAPER. Delivering More Rigorous Testing of Software Systems to Banks and Financial Institutions. Overview

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1 WHITEPAPER Delivering More Rigorous Testing of Software Systems to Banks and Financial Institutions Overview Today, IT is critical to all business segments. Now, most IT departments are feeling the pressure to build a more agile, modern, cost-effective environment, one that has the ability to adapt to business change quickly. As a result most IT departments are looking for ways to accelerate the delivery of valuable, quality software to the business. This goal, however, is hampered by the fact that in the last five years technology has increased in complexity, leaving many IT departments struggling to keep pace with the rate of change. The majority of banks and financial services organisations are also dealing with legacy systems and continually tightening external compliance pressures which also impedes agility. This whitepaper explores the constraints that banks and financial institutions are dealing with when it comes to provisioning new software projects to the business. In particular, the paper looks at the issues banks and financial institutions are faced with when it comes to software testing and explains the impact this is having on the software development lifecycle, user adoption, time to market and ultimately an organisation s competitiveness. It also looks at the options available to banks to deliver more rigorous software testing and showcases some examples of financial institutions that have been innovating and utilising fit for purpose Test Data Management solutions. The paper demonstrates that through the use of end-to-end Test Data Management banks and financial institutions can improve their test cycles and deliver better quality applications to the business at less cost. One of the key ways to get new projects to market fast is to minimise the risk of production defects.

2 Section 1 The need to meet pressing compliance deadlines Banks are facing increased public pressure to get their legacy IT systems up to scratch. A number of recent articles have put a spotlight on the computer glitches that took place on Cyber Monday (2nd December 2013), one of the busiest online shopping days of the year. Conclusions point to the fact that banks are not investing enough in their IT systems and this is seriously hampering their ability to deliver a good service to customers. UK banks have also been ordered by the Financial Policy Committee (FPC) to toughen up their defences in the next six months because of the growing threat of security attacks. As a result of the FPC 2014 compliance deadline, UK banks now have an immediate and ongoing need for better security solutions to protect their critical infrastructure in order to meet this mandate. They also have a need to ensure that they are not exposed to any form of data breach. As banks look to overhaul their systems and put in place new technology and projects to update and safeguard their environment, they also have the added pressure of ensuring that they get these new projects to market before the published deadline. All new software development projects will have to be tested before they go into live production. One of the key ways to get new projects to market fast is to minimise the risk of production defects. Banks will need to create efficiencies in their test data provision whilst mitigating the risk of delays, rework and spiralling costs which slow the time to market of any new software development projects. The Datamaker tool had features we d never thought of. It not only fulfilled the expectations of our development team, it exceeded them! It was taking us over 20 hours to create data for one transaction. Once we started using Datamaker this took a fraction of the time. Large financial institution Section 2 Why is testing so cumbersome? The need for more standardisation Testing accounts for approximately 40% of the average software development lifecycle, and as much as 50% of development and testing time is spent manipulating, searching for or manually creating the right data to meet test case requirements. With these types of percentages, it is important to standardise as much as possible in order to create more efficient processes around testing. However, in reality a huge amount of time is still wasted looking for data which remains a major bottleneck in the testing process. The question is, why does testing continue to be largely a manual process in today s highly automated world? And why can t more standardisation take place within the testing process? Where financial institutions are concerned, the fact that most are dealing with legacy systems, systems that in some cases are over 40 years old, is seriously hampering their ability to move to a more automated approach. Over the years these systems have been added to, new applications have been bolted on and they are now a complex mash of bespoke and new development. As a result it is hard to standardise manual testing processes. To add to the issue, often the knowledge around these systems and various nuances about them remains in the heads of individuals. This makes it increasingly difficult to create standard, repeatable testing processes and is one of the reasons that testing is still incredibly reliant on manual intervention.

3 Growing Data Protection compliance requirements drive the need for better provisioning of test data Banks are under constant pressure to meet ever growing and tightening compliance and regulatory requirements. Current data protection and legislation such as HIPAA, PCI DSS, the EU Data Protection Directive and the UK Data Protection Act means that much more vigilant practices around the use of data need to be adhered to. In fact, the use of production data in non-production environments carries huge risk in terms of financial penalties and brand damage as it is against regulations to use data for any other reason than its stated purpose. Traditionally most financial institutions used full copies of production databases to provision data for development and testing. This practice is no longer viable due to growing legislation requirements, now have to use some form of data masking to solve this problem. However, for banks that have large and complex IT architectures with sensitive data stored across multiple sites and disparate data sources, as well as a lot of manual processes, data masking is very expensive, slow and error prone. Added to this there are specific deadlines around legislation such as SEPA and FATCA. Where SEPA is concerned countries such as the UK, Switzerland and Norway have until October 2016 to achieve full compliance with SEPA messages. However, this single payment-integration initiative which is designed to aid the simplification of bank transfers denominated in euros is putting pressure on UK banks in particular to ensure that they have the standards, procedures and infrastructure in place to meet this legislation. Where FATCA is concerned, European banks holding data on anything that is taxable by the US will have to provide a full report to the IRS. Most UK banks will have intergovernmental agreements in place already. However, this will require banks to have some kind of data profiling and data mining software in place in order to find all this data across the organisation so that they can accurately and confidently report back. With an increased pressure on cost control and cost reduction, banks need to find more intelligent ways of finding the right test data as well as provisioning and creating test data marts. Ensure better requirements are established at the outset More often than not testing issues and production defects are related to not having the right data in the testing environment in the first place. This is often down to the fact that the development team doesn t specify clearly enough at the outset what the testers should be testing. This can then involve rounds and rounds of iterations on testing and circling backwards time again adjusting specifications. When testing teams have received poor requirements they typically end up testing too much of the wrong data. 56% of defects can be traced back to the requirements being undefined or poorly defined. If problems are found in live production, the IT team typically uses an army of people to manually fix the problem. Bugs found in live production are more expensive to fix than if they were found during the testing process. Right now many enterprises use the cloud to undertake their testing and development and to pilot new projects often bringing the project back on-premises when it is ready to. However for many banks this is not an option as they are not comfortable using the cloud because of data privacy issues and the issue of handling complex legacy systems. Section 3 Creating an agile end-to-end testing environment IT has the ability to deliver the secure, modern IT infrastructure that financial institutions need in order to satisfy customers and remain competitive. However, in many cases, testing is a bottleneck that prevents IT from improving quality and reducing time-to-market. To counter this, IT departments need to focus on creating a more agile, automated and standardised testing environment that does not rely on manual processes and is more reactive to change. Implementing an end-to-end Test Data Management (TDM) solution provides financial institutions with total control over their data throughout the software development lifecycle (SDLC). Building clear, unambiguous requirements from the outset helps to ensure quality in testing, whilst shortening test cycles by more than 30%. It also cuts defect creation by up to 95%, reducing costly rework. Clarity in requirements also allows testing teams to better understand what needs to be tested. This allows them to design the perfect, minimum set of tests to cover all of the required functionality. As much as 20% of the average software development lifecycle is wasted searching for, or manually creating, the correct test data. Adopting a more automated approach to finding and making the right data significantly reduces the time lost searching for test data. It is proven that, without good Test Data Management, organisations experience a reduction in application quality as defects are often undetected until production. This ultimately results in quality issues and user disenchantment. Projects are slower and there are greater risks of overruns, which impacts time to market. The knock-on effect is that a lot of manual effort is required. To find data to match test cases To create new data when required Test automation is then impacted because: Integrated systems are not available and not properly developed Large volumes of production data need to be copied Time is lost waiting for data availability The knock-on impact of this is that it exposes financial institutions to: Legislative risk Increased cost Lack of competitiveness/innovation

4 More often than not, this then becomes a C-level issue as a result of either late application delivery or project overrun which causes late time to market and ultimately impacts on the financial institutions competitiveness. This can also result in issues such as low user adoption or bugs and problems in products that are now out of the testing environment and in live production. Any new software solution is only as successful as the users adopting it. Low adoption equates to a failed product. Section 4 How can Grid-Tools help? Financial institutions looking to accelerate the delivery of valuable, quality software need to be able to quickly provision data that is fit for purpose. This means that the data is compliant, realistic, and offers 100% functional coverage in the minimal optimal number of tests to ensure high quality, efficient testing. Being heavily reliant on legacy mainframe systems, banks will be faced with challenges around testing data, profiling, data masking and sub-setting as they try to move this data around and upgrade their systems. Our Datamaker tool facilitates compliance with data protection legislation whilst significantly reducing infrastructure costs by extracting small, secure intelligence subsets from production. However, it is the ability to quickly design, find and make fit for purpose test data, or synthetically create data where none exists that makes Datamaker stand out from the crowd. In summary, Datamaker provides: Data sub-setting and masking Data profiling and test matching Better definition of requirements through our Agile Designer solution A test data warehouse and test data on demand Through Datamaker we deliver significant test process improvements that enhance the performance and effectiveness of testing and development teams to: Automate and improve the data provision process so that they are not managing data in multiple places at the same time. This improves the quality and efficiency of the testing and development teams Accelerate development time by creating a more agile development environment where better quality applications can be delivered to the business faster Find and make data faster using smarter processes, enabling test teams to match tests to the appropriate data and synthetically create the right data Help to facilitate legal compliance by ensuring that we are testing good data as well as the right data Transform applications by improving time to release/ time to production and ensuring that once applications go live they are fit for purpose and designed with the user in mind Ensure continuous application delivery in other words, we deliver a constrain-free development environment Redeploy resources and budgets for other projects to improve business competitiveness and to facilitate innovation 80% of Grid-Tools customers are in the banking, insurance and financial services sector, where we have a strong heritage and experience. Here are three examples of how financial institutions are using our Test Data Management solutions to help improve the effectiveness of their testing environments: UK bank undertakes data migration project with the help of Grid-Tools A large and well-known UK bank was undertaking a data migration project and had a substantial amount of data that needed to be transferred from the old system to the new system. A complex programme of work evolved off the back of the migration and the bank hired various consultants and partners as part of the implementation. Due to the global nature of the teams and the sensitive data involved, the bank utilised Datamaker for fast data masking to de-identify sensitive test data for the various phases of testing. A key priority was to mask and de-identify data alongside the ability to create data slices or subsets. The bank was impressed by the functionality, speed and performance of the Datamaker tool and chose it because it offered the ability to generate data as well as mask and de-identify it. Large financial services company provisions high quality data with Grid-Tools Another large financial services company found that it was unable to manually create the quantities of complex test data or build sufficiently high-quality test scenarios needed within the desired timeframes for a new rating and billing system application. This company is one of the largest and most respected sources for credit ratings, research and risk analysis internationally serving more than 9,300 customer accounts around the globe. It needed to integrate its rating and billing system into a single streamlined application. Provisioning high-quality data for the development of the system was absolutely critical to achieving success. Using Datamaker the organisation was able to successfully and quickly create the required test data and test scenarios. The tool has subsequently become fundamental to its advanced development methodology. Previously it was taking over 20 hours to create data for one complex transaction. Using Datamaker this can be done in minutes.

5 Multinational bank undergoes successful data migration with Grid-Tools A large multinational bank needed to migrate its infrastructure into another bank that it was acquiring. In order to ensure the process went as smoothly as possible the bank s test and development teams were required to validate the data so that it could be uploaded into the bank s back-end systems. The migration team was faced with the task of converting 80 insertion files into their file structure. In order to successfully test this process the testing team required an exact replication of the data. Datamaker provided the bank with the synthetic test data creation functionality it needed and enabled the team to create the initial data within one month. The data was then used successfully across 47 projects allowing the team to meet highly aggressive and tight deadlines. Within three months the bank was able to create cross-domain consistent data, increasing test data quality and efficiency by over 60%. Conclusion Financial institutions need to find ways to deliver better quality software to the business faster and at less cost. No bank can afford the time, the cost or the risk of employing an army of manual testers and will be heavily reliant on finding more efficient ways to ensure the quality of testing. So whether the organisation is building or testing new software, re-engineering systems or migrating applications, banks and financial services companies need to be able to respond to changing requirements by provisioning fit for purpose test data to the right place at the right time to accelerate and improve test cycles. UK: 11 Oasis Business Park, Eynsham, Oxford, OX29 4TP Phone: US: 500 Mamaroneck Avenue, Suite 320, Harrison, New York, Phone: At Grid-Tools we are specialists in the intelligent provision of data for non-production and software development environments. We have a wealth of experience in dealing with customers in the financial services sector. This is our core market and where we deliver 80% of our products and services. Not only do we truly understand the science of testing, we also truly understand the issues that banks and financial sector organisations are grappling with right now. Through a combination of skills, experience and know-how, as well as market-leading tools and methodologies, we can deliver the end-to-end Test Data Management that financial institutions clearly need in order to remain competitive in today s everchanging market. UK: sales@grid-tools.com